So-called “identity theft” has become an increasingly severe problem in our society. Identity theft includes the unauthorized use of another's personal information for unlawful purposes. Two types of identity theft are “credit card fraud” and “loan fraud.” With credit card fraud, a thief obtains another person's credit card number, and possibly additional credit-card-related information or personal information, and uses it to fraudulently purchase goods for their benefit, leaving the true credit card owner, the merchant who sold the goods, or the credit-card issuer to absorb the bill for the improperly obtained goods. With loan fraud, the thief uses another's personal information to apply for a loan, typically hoping to receive cash or credit from a loan provider or issuing bank but never intending to repay the loan or exercised credit. The person whose information was improperly used, even if they are excused from repaying the fraudulent bill or loan, may experience a variety of problems and inconveniences. Adverse consequences to one's credit rating may result, and remedying the issues may require an immense amount of time, effort, and expense.
Individuals' personal information, including credit card numbers, may be compromised in a variety of ways, which may lead to identity theft of the type described above. In some cases, a person may be aware that his or her personal information has been compromised, such as if a thief abducts the person and steals his or her wallet or purse. Other times, however, the person may be unaware that his or her personal information has been compromised. For example, a thief may rummage through the person's discarded trash in search of financial documents containing sensitive personal information that can be exploited. A recent trend in the area of identity theft involves an unscrupulous employee of a business that has access to credit card numbers or other sensitive customer information illicitly obtaining the credit card numbers or other information and using it for nefarious purchases, establishing fraudulent credit, or selling the information to others who intend to do the same.
To avoid the headaches and frustration that can accompany investigating, isolating and remedying the effects of these types of crimes, individuals may wish to safeguard their personal information, including credit card number information. One way that this might be done is to pay for all purchases using cash, so as to avoid using credit cards and the possibility that one's credit card number may be stolen. However, this is increasingly unrealistic for many consumers. For one thing, carrying a large amount of cash involves a different set of risks, including the risk of robbery, pick-pocketing, losing the money, or not having enough cash on hand to cover a purchase. In addition, the inconvenience of attempting to carry a sufficient amount of cash for routine daily and unexpected purchases may become tedious. As a result, despite the risks associated with dispersing sensitive personal information, many people increasingly rely on one or more credit cards for making daily purchases.
Some transactions may not typically be completed using cash, such as online purchases. In executing an online purchase, a consumer may access a business's online store, select an item for purchase, and provide a name, billing address, shipping address, e-mail address, phone number, and credit card number, for example. If the business is suspicious that the order is fraudulent, an employee of the business may call an issuing bank that issued the credit card, and may ask for verification information associated with the credit card number provided by the consumer. Before the issuing bank provides such information, the issuing bank may ask for the credit card number and consumer identification information. The business's employee may then respond with the requested information, the business having collected the information when receiving the order, and the issuing bank may provide the verification information. However, this typical online purchase scenario may expose the consumer to heightened risk of identity theft, credit card fraud, or loan fraud because the customer's sensitive information is provided and available to the business, including employees having access to the information, which may increase the likelihood that the information may be misused.